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So you’ve set up your store with Magento and now it’s time to sort out a Merchant Account and start taking orders. It should be easy right?

Wrong!

The Merchant Account marketplace can be a minefield. There are loads of companies out there, but not many good ones, which is why credit card processing often costs so much more than people expect.

Don’t Worry though, we’ve set up this page to guide you through the process of find a good Merchant Account provider for Magento. So let’s get going!

OK, if you are looking for the best Merchant Account to work with Magento it needs 3 things.

1. Integration with Magento (of course!)

2. Low Processing Costs

3. Great customer service

Many companies will say they can work with Magento, but we look for companies that have actually developed Mangento apps to integrate with the Magento platform. This prevents any potential problems, because if the system has bugs or goes down, because it’s not specifically designed to run together, then a site can’t process orders and loses money. Click Here for our current recommendation for the best Merchant Account for Magento Integration.

How Do You Get Low Processing Costs?

The key to finding a company that truly offers low processing costs is to actually understand how the credit card processing companies actually charge. Normally, when people first speak to a merchant account company they want to know what the ‘rates’ are… However, this can be a big mistake and lead to processing costs much higher than people initially thought.

Why?

The rates are same for every merchant account company…! What differs is the mark up that the processing company puts on. This is a diagram of how the charges break down. It’s for a theoretical transaction of $1000.

By far the biggest charge is the Interchange fee, and this is also where many Merchant Account companies get sneaky and stick on a huge mark up.

How Do They Do That?

By using what’s called Tiered Pricing. The Interchange Fee is actually based on things like the card used, whether it’s keyed or swiped, and whether it’s online or face to face etc. From these variables the transaction is assigned a category based on how secure the transaction is thought to be (the liklihood of fraud happening). In total there are over 200 possible categories, and they are the same for all Merchant Accounts.

This fee actually goes to the bank who issues the card, not the merchant account company which is why some use tiered pricing to put a mark up on. In Tiered pricing instead of passing on the exact cost of each Interchange category (known as Interchange Plus pricing), the charges are bundled into 3 categories, Qualified, Mid Qualified and Non Qualified.

Here’s a table showing the difference in Price between Tiered Pricing and Interchange Plus Pricing

A very big difference! To avoid Tiered pricing don’t ask a company for their rate, ask whether they offer interchange plus. Click Here for the cheapest Merchant Account with Interchange Plus Pricing and Magento Integration.

Assesment Fee and Merchant Account Service Fee

The Assesment Fee is the fee that is paid to Visa / Mastercard etc. It’s the same everywhere, so not something that can be found cheaper at one provider over another. The Service fee does differ though. However, you simply have to ask how much it is to make a comparison between different Merchant Account providers.

Other Features to Look for in a Merchant Account

Fast application process with no fees, long-term contract or early termination fees

They offer the cheapest overall processing with Interchange Plus pricing. The best rates are actually guaranteed in writing.

They have a 99% approval rate and set up withing 24 hours

Integration with Magento

They operate Month to Month rolling contracts with no get out clause meaning that the contract can be cancelled at anytime, so no risk. Most providers require a contract of at least 3 years with cancellation fees that may be over $1,000 — the last thing you want to worry about when you’re just getting started with online sales.

No application / start up fees, and no other hidden fees.

They maintain an A+ rating with the BBB with all complaints filed resolved to the customer’s satisfaction. This underlines their excellent customer service. Merchant Warehouse uses in-house customer service and technical support agents who are available 24/7 and offer assistance setting up your Merchant Account and payment gateway to work with Magento.

The payment gateway fees are included as part of their package

To set up a Merchant Warehouse merchant account with Magento, you can use the Authorize.net payment gateway or the provider’s own MerchantWare, a payment gateway that’s PA-DSS validated and lets you manage your merchant account securely online. MerchantWare allows you to accept credit cards, EBT and loyalty cards and PIN- or signature-based debit cards.

If you already have Magento set up and a merchant account through Merchant Warehouse, you can install the MerchantWare payment gateway extension for free and begin accepting payments right away.